A mobile payment pilot launching this month in New Zealand will enable a small group of participants in Auckland to use NFC-equipped mobile handsets to pay public transit fares and also to make purchases at selected retail outlets.
Telecom New Zealand, Westpac Banking Corp. and Auckland Transport are joining forces for the four-month trial, the companies announced April 30. The trial initially involves 30 staff members from the various organizations supporting the trial.
Eventually, the platform will be open to other merchants, says Desmond Nash, a Telecom New Zealand spokesperson.
"Any business will be able to [use the platform to] develop applications that will support customer interaction between the business and the customer's mobile," Nash tells PaymentsSource. "This includes businesses associated with payments, ticketing, loyalty, identification and many more, which will benefit customers.”
The pilot initially will allow participants to use NFC-enabled phones from Telecom’s XT network, the mobile network that Telecom New Zealand runs and operates nationwide, to tap and pay for rides on Auckland Transport's buses, trains and ferries. Auckland Transport in May 2011 introduced a contactless smartcard payment system called Hop.
Participants in the NFC trial will set up a prepaid account with the mobile carrier linked to a bank account that can be topped up using Paymark’s ATM network.
Key benefits for bank customers include immediacy of payments and the ability to track mobile purchases, Chris Mirams, a Westpac spokesperson, tells PaymentsSource. "In the long term, the customer will be able to access information to assist with budgeting, such as how much they are spending and where."
The partners hope the pilot project also will drive awareness and usage of contactless payments in retail and similar environments, John Devlin, a group director at ABI Research, tells PaymentsSource.
"There is certainly an obvious 'sell' for NFC and mass transit, particularly where a contactless smart card is already in use," Devlin says. "The technologies are very similar and the ability to integrate acceptance of contactless bank cards and NFC-enabled mobiles can be achieved with relatively little upheaval. Commuters can see how a contactless mobile can replace a contactless card and they typically have lower levels of concerns around security and usability since they are already used to similar behavior.”
The trial offers other benefits to participants, Devlin notes.
"Telecom New Zealand gets to open a new revenue stream as a service provider while Auckland Transport can look to make savings on smart cards and ticket management," says Devlin. Both companies also may use the trial to deepen customer relationships with added-value services including text alerts and direct offers, he suggests.
Customers will also benefit by having both payment and loyalty information on the same device, he added.
"Rather than having to haul out two to three cards for a transaction, it is all done with a tap and go," through a single device, adds Mirams.
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